Digital Divide Widened by Systemic Racial Discrimination, Free Press Says
Fostering prepaid and resold wired internet services and thereby creating competition similar to that existing in the wireless industry could close the digital divide and address systemic racial discrimination reducing internet adoption among minorities, Free Press reported Tuesday. It may be a challenge to convince a Republican-led FCC next year to require those options or stop market-power abuses, said Policy Director Matt Wood in an interview. While a prepaid internet service offered by Comcast lowers one adoption barrier, it may raise other hurdles, Wood said.
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Barriers to subscribing to wired internet services are higher than for wireless, because the wireless market includes numerous prepaid and resold service options, the report said. “Higher adoption levels in the wireless marketplace stand in stark contrast to the market for high-speed wired-internet access, which is a duopoly at best,” said Research Director Derek Turner in a news release. “Wired providers have failed to offer resold or prepaid services, and generally have required potential customers to undergo credit checks or make cash deposits -- practices that contribute to the digital divide by exacerbating existing racial disparities in credit scoring, housing and other economic sectors.” NCTA and USTelecom didn’t comment.
The commission has authority to spur development of resold and prepaid wired home internet services, said Wood. But using that power is unlikely to be on the agenda of FCC landing team member Jeff Eisenach or Republican Commissioner Ajit Pai, who say they want to roll back net neutrality and other rules, Wood said. “I’m not hopeful of their intentions, but I’m hopeful that we have some political willpower and tools at our disposal to fight these kinds of rollbacks.” Wood said it’s “wildly unpredictable” what President-elect Donald Trump will do. Trump ran on a populist platform, but the FCC landing team is “deregulatory to the bone,” said Wood.
Comcast completed rolling out prepaid internet services announced in July (see 1607210063), and expects to finish rolling out prepaid TV service in all markets by the middle of 2017, a spokesman said Tuesday. The cable company also sells Internet Essentials, a broadband adoption offering targeting low-income customers. The Comcast prepaid service lowers one hurdle by not requiring a credit check, but the prepaid services are more expensive than Comcast’s post-paid plans and add an activation fee, said Wood. The spokesman responded that upfront costs of the prepaid service are one-time and cover 30 days of service plus all equipment, which the customer keeps. Prepaid plans “are priced similarly to postpaid services that offer the same level of service,” he said.
The group said 68 percent of black people have home internet access, compared with 81 percent of white people. Eighty-three percent of Asians, 70 percent of Hispanics, 72 percent of American Indians and Alaska Natives, and 68 percent of Native Hawaiians and Pacific Islanders have home internet access. People of color comprise 38 percent of the total U.S. population, but 47 percent of the population without home internet. Minorities comprise 48 percent of the 3-17-year-old group but 62 percent of the youth population without home internet. The report cited Census Bureau demographic data and FCC broadband data.
Communities of color frequently say cost is the reason they don’t subscribe to home internet, despite high demand, Free Press wrote. While 18 percent of non-adopting white households said they would subscribe at a lower price, 33 percent of Hispanic and 28 percent of black non-adopters said they would. Income differences don’t entirely explain the digital divide, which exists even in the lowest-income quintile, Free Press said. Among families making less than $20,000 yearly, 58 percent of white people have home internet compared with 51 percent of Hispanics and 50 percent of black people. Accounting for differences in income, education, age and other factors, Free Press observed a home-internet adoption gap of 6 to 8 percentage points between white households and black, Hispanic and Native American households.
Exposure to the internet at work may influence broadband adoption at home, said Free Press, with about 95 percent of employed individuals using internet at work saying they have home internet access, compared with 66 percent of employed individuals who don’t go online at their jobs. Among the employed, 61 percent of white people go online at work compared with 38 percent of Hispanics and 47 percent of black people. Employers can narrow the digital divide by considering ways to ensure more employees are exposed to the internet in the workplace, Wood said.
The finding of home broadband adoption gaps across race and ethnicity lines is consistent with a Pew Research report last year on home broadband adoption (see 1512210032), Pew Senior Researcher John Horrigan said Tuesday. But the Pew report didn’t address -- and Horrigan didn’t comment on -- possible root causes or solutions. The Free Press findings on broadband adoption by race are also consistent with what Connected Nation has seen, that group's CEO Tom Ferree said in a statement. Connected Nation found the broadband adoption rate for African-Americans and Hispanics is 64 percent, he said. "While our research shows that cost is a significant barrier to broadband adoption (the second largest), a perceived lack of relevance or value has been for some years and remains the single biggest barrier to adoption, with 35% of non-adopters citing it as the reason they do not subscribe."